What the Stimulus Accomplished

By THE EDITORIAL BOARD

February 22, 2014

Of all the myths and falsehoods that Republicans have spread about President Obama, the most pernicious and long-lasting is that the $832 billion stimulus package did not work. Since 2009, Republican lawmakers have inextricably linked the words “failed” and “stimulus,” and last week, five years after passage of the Recovery Act, they dusted off their old playbook again.

“The ‘stimulus’ has turned out to be a classic case of big promises and big spending with little results,” wrote Speaker John Boehner. “Five years and hundreds of billions of dollars later, millions of families are still asking, ‘where are the jobs?’ ”

The stimulus could have done more good had it been bigger and more carefully constructed. But put simply, it prevented a second recession that could have turned into a depression. It created or saved an average of 1.6 million jobs a year for four years. (There are the jobs, Mr. Boehner.) It raised the nation’s economic output by 2 to 3 percent from 2009 to 2011. It prevented a significant increase in poverty — without it, 5.3 million additional people would have become poor in 2010.

And yet Republicans were successful in discrediting the very idea that federal spending can boost the economy and raise employment. They made the argument that the stimulus was a failure not just to ensure that Mr. Obama would get no credit for the recovery that did occur, but to justify their obstruction of all further attempts at stimulus.

This may be the singular tragedy of the Obama administration. Five years later, it is clear to all fair-minded economists that the stimulus did work, and that it did enormous good for the economy and for tens of millions of people. But because it fell short of its goals, and was roundly ridiculed by Republicans and inadequately defended by Democrats, who should have trumpeted its success, the president’s stimulus plan is now widely considered a stumble.

This enabled Republicans to champion an austerity policy that produced deep reductions in discretionary spending, undoing many of the gains begun in 2009. The result has been a post-stimulus recovery that remains weak and struggling, undermining an economic legacy that should be seen as a remarkable accomplishment.

The legacy of that policy, detailed by the White House last week in its final report on the effects of the stimulus, affects virtually every American who drives, uses mass transit, or drinks water. It improved 42,000 miles of road, fixed or replaced 2,700 bridges, and bought more than 12,000 transit vehicles. It cleaned up water supplies, created the school reforms of the Race to the Top program, and greatly expanded the use of renewable energy and broadband Internet service.

It’s probably too late for the White House to persuade skeptics about its program, but its assessment echoes the views of many independent economists and the independent Congressional Budget Office. “The Recovery Act was not a failed program,” the C.B.O.’s director, Douglas Elmendorf, told annoyed Republican lawmakers in 2012. “Our position is that it created higher output and employment than would have occurred without it.”

Government spending worked, helping millions of people who never realized it. And it can work again, whenever lawmakers agree that putting people to work is more important than winning ideological fights.